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A Qualified Income Trust (QIT); how does it impact Medicaid?

Alva, maddening part is that each - !EACH! - State Medicaid administration on this varies. So this is my NAL understanding on how Miller aka a QIT runs logistically for States that allow a Miller to happen. & for more fun, not all States allow for a Miller & do a pooled income or income cap and in a few States it’s too bad so sad you’re SOL.

this is how it’s been explained to me…. MeMaw#1 is “overresourced” at $4080 income in a State w/income max $2829. She has 3 sources of income 1. SSA $2345, 2. pension $1234 3. retirement $501. Pension and retirement not 100% guaranteed fixed income for MeMaw lifetime. So they can’t work for the Miller as Miller requires income source to be absolutely guaranteed. Which SSA $ is. So only SSA gets placed to become owned by the Miller and in turn the SSA $ paid to the NH under a separate payment and paid in full as Memaw#1 / Miller Trust monthly amount of $2345 is under the $2829 income max for her States LTC Medicaid. On the 2 other incomes, MeMaw still is the owner and she pays her Share of Cost to the Nh from them less small PersonalNeeds allowance. Let’s say mom is in TX and their PNA is $75 so she would have an SOC of $1,660 each month.

By doing a Miller, MeMaw SSA is no longer owned by her but owned by the Trust. So she is impoverished enough for LTC Medicaid. The banks that do this (if your State uses a banking system) will be banks that also handle ABLE accounts which provide for some on low income programs to have assets beyond the usual. ABLE is for those who have a disability from birth to age 26 with annual contribution max of - I think - 14K and maximum of 110K.

But back to Miller, if another MeMaw is also over resourced with a SSA of $3200, pension of $1234 and dividend of $501, she too can do a Miller. But for MeMaw#2 that Miller has an overage of $371 ($3200 less her State set income max of $2829). The overage builds up in the bank account that is the pass thru owner for the Miller. When MeMaw#2 dies, State Medicaid gets the overage $ as they are listed as the primary beneficiary for the Trust. Done as a way to be compliant for Estate Recovery. Only if $ left after State does recoup on recovery will $ go to heirs. I think we’re going to see QIT issues come up in the future as so many from their SSA alone over the $2829 income max majority of States use. Lots make SSA FRA max $3822 & age 70 $4873.

In my understanding ends up being a good bit of inequality for SOC payments to a NH as in theory cannot choose an applicant with a higher income than one who is not. And as most admits into a NH come from the post hospitalization to rehab path, so NH really don’t know income details till much later (as health insurance is paying for rehab, then they end up staying).

But sometimes that isn’t the case…. and this was my mom as she went from IL to a NH directly. She bypassed AL stage or coming in post hospital rehab path. At the time I had no idea this was quite unusual. Her IL said she was edging needing higher level of care…. LSS I had to shop around to find a spot and got to tell you at each & every NH I toured the admissions gals when they heard my mom’s mo income they were positively giddy with the thought of having her as a custodial care new resident. Mom’s mo income totals really close to max. So NH would get moms $ as SOC and also get fixed $ paid by the State LTC Medicaid daily room&board custodial care reimbursed day rate. It was for the NH between the 2, pretty close $wise as having a private pay resident. That is why they were so giddy. My MIL on the other hand had a low SSA, under 1K, and that was it, no giddiness. LOL. NH are not to prioritize an admission, but if they can they will.

The tsunami of boomers is going to collapse the LTC care system. It’s not going to be pretty.
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AlvaDeer Oct 13, 2024
That's OK. "Sick" another poster today seems to think filial laws will pay for everything through our kids.
No, I kid you not, because you cannot make this stuff up.

Link:
For three yrs. I've “lurked” on this site, reading posts that solved my misery as an only-child caregiver of two nearly 90 yr. old parents. - AgingCare.com
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There was another similar post. Some States do not allow QIT trusts. But, they also don't have a monthly income cap. Meaning, if all you have is SS and maybe a pension you can qualify for Medicaid.
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Oh, thank goodness for the Igloo!
Igloo, I GET that the person in this screnario is INCOME RICH (or too much so to qualify for Medicaid) and assets poor (or has spent them down to nothing on private pay. And I get that the Miller Trust takes in the excess so that the person can qualify, but I don't get how this all actually works.

MeMaw for instance has about 2,000 in SS and about 4,000 overall income lets say. Too much to qualify for Medicaid but not enough to get that single room anywhere. So how exactly does Medicaid/Government pay. They give all the SS to the Nursing Home. I get that. But the stuff that goes into the "Miller Trust Account"......who gets THAT and who CONTROLS that. That is to say who can withdraw from that protected QIT. I guess I am so far back at the start line here that there's just a lot of research I need to do myself.

So glad when you are here to answer these complicated questions.
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97yroldmom Oct 11, 2024
Alva,

Hopefully Igloo comes back to check my work but I think I understand that the POA opens the trust at their bank and the agreed amount of money (the excess income) goes into it each month and then when the LO dies, the money goes to the State Medicaid. It doesn’t go to the NH. It doesn’t go to the heirs.

What I don’t understand is what happens if the elder leaves the NH before they die? Does the money stay in the trust account until the person dies or does the money get sent at the point the person checks out of the NH?

Lea’s answer below goes into creating the trust.

Note assets don’t go into the trust. So the house and the car don’t go into the trust. It’s only the excess Income that goes into the trust.
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If you’re asking abt this, Im guessing that your mom has filed or is going to file an LTC Medicaid application so that this Medicaid program can pay for her costs to live in a facility. Is this it? I’m guessing it is and my answer is based on this being the case.

Hang with me as NONE of this is straightforward….. LTC Medicaid is the only governmental program that will pay for custodial care costs. To be eligible you have to meet both a medically “at need” evaluation and a financially “at need” level. By custodial this means LTC Medicaid will pay a facility the room & board costs in a SNF/NH or pay via a waiver for AL or MC if - again IF - your State does waivers. Not all States do waivers, it’s only for NH. If yours does AL or MC, consider yourself fortunate.

Please realize that LTC Medicaid is NOT health insurance, her health insurance will still be Medicare and then whatever Medicaid as health insurance system your State does for those who are “duals”. Dual is in Medicare and Medicaid for health insurance benefits. Btw the M&Ms and LTC Medicaid almost all her costs to be in a NH are covered.

if the facility has told you that y’all need to get a QIT done, it is bc your mom has too too much monthly income for the income max set by your State. Income NOT Assets. Majority of States have income max at $2,829 per mo and nonexempt assets max of 2K. That’s it. So basically impoverished. Problem is many get way more than $2829 a mo so what to do??….. they do a QIT. And if their income comes from more than only SSA, they do the QIT on the SSA income as its easier. That SSA $ becomes owned by the QIT and so it the applicant under $2829 for the other mo income they still get paid.

Say MeMaw has a really bad fall and end up having to permanently live in a NH. She gets $2345 SSA per mo and she also gets a pension of $1234 per mo and then a teeny retirement of $501 a mo. Total $4,080. Not enough to pay the 10K a mo for the NH. MeMaw has 32K in savings and has spent it down by private paying for the Nh for 3 months so she’s left with 2K. She does not have enough income to continue to private pay so she / her POA file for LTC Medicaid as this NH participates in the State program and has an open bed for her to stay in. Medically she has a nice fat chart to show “at need” for skilled care. But that $4,080 has her “over resourced” for LTC Medicaid program fixed at $2,829 max. What gets done in States that allow for QIT is that her SSA income legally goes into a QIT created for just this purpose and this purpose only. How exactly it is done varies by State. So MeMaw does the QIT and the NH gets paid usually in full her SSA $ each month. The other 2 incomes of $1234 & $501 become a Share of Cost (SOC) she has to also pay the NH each month less whatever her State has for its Personal Needs Allowance. PNA too varies by State and most do $50 or $75 per month. PNA $ is restricted spending and most of the time gets completely used up to pay for beauty shoppe and clothing / toiletries replacements.

some States make QIT easy peasy forms. Others have it that you need an attorney to draw it up. Someone at her current facility will know how it runs. If you as POA wait till she has zero spend down in asset $ left, you will end up having to pay for the attorney if that’s how it’s done in your State. But she will then qualify for LTC Medicaid.

Please pls realize that due to the SOC, and the low PNA, if your mom has debts, or has kept her homestead and a car, she will have no-nada-zero $ to pay for any of these. Debts like CC get defaulted. LTC allows for home and a car to be exempt assets while alive but on family to pay all costs every mo she is in the NH and also do this probably for 1-2 years after death and go through probate, estate recovery stuff. Can be done but tends to be unwieldy for most. & runs risk that family stop paying & helping with empty house and the POA gets stuck dealing with it all.
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Good Attorney.
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AI Overview, from Google:

A Qualified Income Trust (QIT) is a type of trust that allows people with incomes above the Medicaid limit to become eligible for Medicaid: 

 
How it works
A QIT, also known as a Miller Trust, allows individuals to set aside a portion of their income each month into a trust account. The money in the trust account does not count towards the individual's income for Medicaid eligibility purposes. 
 
Purpose
A QIT is intended for people who have too much income to qualify for Medicaid but not enough money to pay for long-term care on their own. 
 
How to set up a QIT
To establish a QIT, you need to: 
 
Draft a trust document that meets the requirements. The trust must be irrevocable and only the individual's income can be placed into the trust. 
 

Open a trust checking account at a local bank. The account should be titled similarly to the name of the trust. 
 
Submit a copy of the trust document, trust checking account information, and proof that income will be deposited into the trust on a monthly basis. 
 
QITs do not help people who are over the Medicaid asset limit meet that limit. 
 
Now that we all know what a QIT account is thanks to Google, do you have a question??
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Lovemom1941 Oct 11, 2024
One final thing. When all is said and done, whatever is in that account is collected by Medicaid
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